I think the contract should be written in such a manner in the first place that renegotiating the content or delivery date does not require rewriting the contract. In other words, the contract should allow for changes.

Lasse Koskela wrote:I think the contract should be written in such a manner in the first place that renegotiating the content or delivery date does not require rewriting the contract. In other words, the contract should allow for changes.

This seems to be the best case to have a client who allows changes to a contract. But is that realistic? I haven't seen such client.

Lasse Koskela
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posted Jan 04, 2009 13:45:27

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a client who allows changes to a contract. But is that realistic? I haven't seen such client.

Note that I didn't say changes to the contract. I'm referring to one contract allowing changes in what is being developed under that contract. And it is business as usual for my company (a software consultancy).

Darya Akbari
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posted Jan 04, 2009 14:26:31

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Lasse Koskela wrote:Note that I didn't say changes to the contract. I'm referring to one contract allowing changes in what is being developed under that contract. And it is business as usual for my company (a software consultancy).

Well our clients never sign such kind of contracts .

But anyway, don't you have to negotiate the new requirements that arise during your project? Or how do you charge your client for your extra work?

Lasse Koskela
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posted Jan 04, 2009 15:53:39

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Darya Akbari wrote:

Lasse Koskela wrote:I'm referring to one contract allowing changes in what is being developed under that contract.

But anyway, don't you have to negotiate the new requirements that arise during your project? Or how do you charge your client for your extra work?

Yes, the "requirements" are negotiated during the project. That's the whole point - we don't want to write a contract that prevents this negotiation from happening. Or, we don't want to renegotiate a contract just to renegotiate requirements.

The contract is about the business relationship between two companies. The requirements are about what the two companies build within that relationship. By mixing the two into a contract, we would be simply creating a dysfunctional relationship - one where the two companies' interests are constantly clashing.

You might want to check out some of the links regarding "agile contracts" that I've bookmarked into del.icio.us.

The soul is dyed the color of its thoughts. Think only on those things that are in line with your principles and can bear the light of day. The content of your character is your choice. Day by day, what you do is who you become. Your integrity is your destiny - it is the light that guides your way. - Heraclitus

Darya Akbari
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posted Jan 05, 2009 16:17:13

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Lasse Koskela wrote:Yes, the "requirements" are negotiated during the project. That's the whole point - we don't want to write a contract that prevents this negotiation from happening. Or, we don't want to renegotiate a contract just to renegotiate requirements.

The contract is about the business relationship between two companies. The requirements are about what the two companies build within that relationship. By mixing the two into a contract, we would be simply creating a dysfunctional relationship - one where the two companies' interests are constantly clashing.

You might want to check out some of the links regarding "agile contracts" that I've bookmarked into del.icio.us.

Thanks Lasse for your bookmarks, I'll will definitely go through all of them. What I've seen so far from them is that they distinguish between fixed-price and optional scope contracts. How do you sell a optional scope project to a new client who want to hear a fixed price from you? How do you sell an optional scope contract when there are others (your competitors) who give a razor sharp fixed price to the client.

Ilja Preuss
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posted Jan 05, 2009 16:52:54

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Darya Akbari wrote:How do you sell a optional scope project to a new client who want to hear a fixed price from you? How do you sell an optional scope contract when there are others (your competitors) who give a razor sharp fixed price to the client.

Well, it depends on prior experiences of the client. Some clients actually do understand that fixed prices basically mean that it's the quality that's variable. Often they just don't know any alternative.

Lasse Koskela
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posted Jan 05, 2009 16:57:45

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Darya Akbari wrote:How do you sell a optional scope project to a new client who want to hear a fixed price from you? How do you sell an optional scope contract when there are others (your competitors) who give a razor sharp fixed price to the client.

If the client wants a fixed price, fixed scope contract, it's your responsibility to help him understand that it might not be in his best interest. If he fails to see that, then you can't sell an optional scope project to him.

I'm not saying it's easy to get these kinds of contracts. It might require a fixed-everything contract to get that relationship started. Once the client understands that you're not trying to screw with him, and when he's seen the quality and integrity of your work, he's that much more comfortable with the idea of not fixing everything in a contract. And one day, you'll be able to sell an optional scope project to that client.

As far as competition goes, if they bid on a fixed-everything contract then that's their loss (including the client). If they bid lower than you, they're either better suited for the job or they're shooting themselves in the foot. In either case, again it's their loss. You could bid even lower than them but that would be like pointing shotguns at both of your feet. Instead, you should try to help the client see your value-add, the advantage you can provide over your competition. And the optional scope contract model might be one big advantage...

Darya Akbari
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posted Jan 06, 2009 02:55:15

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Lasse Koskela wrote:I'm not saying it's easy to get these kinds of contracts. It might require a fixed-everything contract to get that relationship started. Once the client understands that you're not trying to screw with him, and when he's seen the quality and integrity of your work, he's that much more comfortable with the idea of not fixing everything in a contract. And one day, you'll be able to sell an optional scope project to that client.

This is the way how it works in a competitive situation. At the begin of a relationship to a new customer we need a fixed price contract. Later when there is trust between you and the client you can use an optional scope contract.